Tech titans buy Paytm ESOPs encashed on valuation surge

About eight senior executives of mobile wallet and e-commerce platform Paytm have sold part of the shares they received under the employee stock option plan (ESOP) at a premium.Digbijay Mishra | TNN | February 10, 2016, 08:33 IST

According to latest documents filed by Paytm with the registrar of companies (RoC), the executives sold about 80,000 shares and the same was approved by the board in its meeting held in China on January 30.BENGALURU: About eight senior executives of mobile wallet and e-commerce platform Paytm have sold part of the shares they received under the employee stock option plan (ESOP) at a premium. The buyers were Amit Singhal, who retires from Google later this month, Neeraj Arora of WhatsApp, and Ruchi Sanghvi, Facebook’s first woman engineer — all of whom are on the board of Paytm.

According to latest documents filed by Paytm with the registrar of companies (RoC), the executives sold about 80,000 shares and the same was approved by the board in its meeting held in China on January 30. Paytm is backed by Chinese e-commerce major Alibaba.

The RoC filing did not disclose the premium at which the shares were sold. But given the dramatic increase in the company’s valuation over the past two years — it was valued at about $3.5 billion in its last round of funding in late 2015, up from less than $1 billion early last year — the executives would have likely received a substantial sum.

When contacted, a Paytm spokesperson declined to comment on the matter. A senior executive who was among those who sold the shares said, “Several executives have sold their shares at a premium in this round. But this is only a part of the total ESOPs these executives hold in One97 Communications (the company that runs Paytm).”

As for the buyers, Neeraj Arora is the global business head of WhatsApp, the world’s largest messaging app, and is an independent director on the board of One97 Communications. Ruchi Sanghvi is an executive director on the board. Amit Singhal, often referred to as Google’s search king, having been responsible for its search algorithms, is the latest to check into the Noida-based company.

Owing to fierce completion among e-commerce companies, ESOPs have emerged as a major talent retention tool. In November, Flipkart reportedly sold a marginal stake in its employee trust fund to high net worth individuals as part of a talent retention move.

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